Three of the few remaining, publicly-traded ad-tech companies filed their latest financial results last week with revenues impressing Wall Street in a sign of green shoots of recovery in the sector.
The Trade Desk filed third quarter revenues of $118.8 million, representing an annual increase of 50 percent, while Rubicon Project posted revenues of $29.7 million, a decrease of 16 percent year-on-year, but up 4 percent sequentially. Meanwhile, Telaria posted revenues of $13.5 million representing a 6 percent increase in revenue.
The Trade Desk continues to profit from its point of differentiation
The Trade Desk continues to be the ad-tech darling of Wall Street, with projected revenues of $148 million for the closing quarter of the year, based on favorable projections for its burgeoning connected TV business as well as strong growth in foreign markets, notably in APAC.
Jeff Green, The Trade Desk CEO, described the strategy behind the company’s success to analysts came from its inherent point of difference to companies like Facebook and Google.
“Facebook is where people go to buy Facebook and Google is where people go to buy Google. Amazon is where people go to buy Amazon, but the Trade Desk is the place where people go to buy everything else worldwide,” he said.
Green later went on to highlight the launch of its Unified ID Solution, adding that it would help clients struggling with audience targeting in the wake of Google limiting the pass back of its DoubleClick advertiser ID in the wake of GDPR ads, well as Facebook’s limitation of pixel sharing.
He believes that both parties rolled back their ability to share audience data because of the vast amount of audience data within their platforms, but the ad-tech company is in a more liberated position to help advertisers.
As a result, The Trade Desk is now getting new inquiries from advertisers and agencies that previously would have spent with the internet’s largest media sellers.
In his assessment, Brian Wieser of Pivotal Research echoed this sentiment, but he did reiterate his point that The Trade Desk’s lofty valuation is in line for rationalization.
“If there is an opportunity, it may come if The Trade Desk can take meaningful share from Google’s DSP [demand-side platform], which despite well-known product limitations, probably has more than half of the total market for DSP activity,” he added.
Rubicon Project is still smarting from dropping its buy-side fees
Meanwhile, Rubicon Project reported a similar uptick in ad spend on its platform, although it continues to count the cost of dropping buy-side fees from the end of 2017, a practice that had previously embroiled it in controversy.
This helped explain the anomalous results of ad spend on the platform rising an impressive 24 percent year-on-year during the quarter but revenue experiencing a 16 percent dip year-on-year.
Michael Barrett, CEO of Rubicon Project, described the issue of the dip in its buy-side fees, or “takerate,” as a “near term” issue as well as the rising tide share of private marketplace transactions on the platform which would dissipate time.
“So, you will see lower takerate but it should result in greater ad spend growth,” he said.
“In the revue it’s net positive, that’s how we see that sort of playing out. Hard to sort of say where it’s actually at in, you know, two years.”
Telaria continues its sell-side turnaround journey
Since parting ways with its buy-side operations through the sale of Tremor Video to Taptica, Telaria has posted reasonably positive results although a number of weeks back it advised investors that revenues for the third quarter of 2018 would be below expectations, having earlier advised that it would earn up to $17 million in Q3.
Mark Zagorski, Telaria CEO, told investors, “We restructured and expanded our sales organization, adding Adam Lowy, a CTV industry pioneer who led advanced TV at Dish’s SlingTV, as our Chief Commercial Officer, and further built out the team with key sales hires.”